Macro Substitutive Elasticity, Domestic Productivity and Rectification of Imported Product Range Gains

Abstract

Abstract: Based on the data of China and 124 import countries from 2006 to 2016, this paper verifies the substitutability of China's domestic product ranges for imported product ranges, examines Armington macro substitutive elasticity and the impact of domestic productivity on the gains of imported product ranges, and measures the biased errors of the gains of Chinese industrial products trade. The results show that under the conditions of both China's domestic products ranges and the imported product ranges being substitutable, China's domestic productivity will amplify the impact of trade costs on the imported product ranges. The higher Armington macro substitutive elasticity, the greater the impact of trade costs on the imported product ranges. In average, the trade gain of China's industry is overvalued by 12%. The average trade gain caused by domestic productivity is overestimated by 9%. In terms of industrial structure, the import gains of 12 industries are either underestimated or overestimated, in which the trade gains of coal is over-estimated by 3 to 5 times. Therefore, we should estimate objectively the gains from the imported product ranges and keep on improving domestic productivity.

Key words: macro substitutive elasticity, domestic productivity, trade costs, rectification of gains from imports

CLC Number:

F752.61

Xu Tong-sheng, Fang Yu-xia. Macro Substitutive Elasticity, Domestic Productivity and Rectification of Imported Product Range Gains[J]. Contemporary Finance & Economics, 2021, 0(8): 102-114.

References

[1] Feenstra R.C. New Product Varieties and the Measurement of International Prices[J]. The American Economic Review, 1994, 84(1): 157-177.
[2] Broda C., Weinstein D.E. Globalization and the Gains from Variety[J]. The Quarterly Journal of Economics, 2006, 121(2): 541-585.
[3] 陈勇兵, 赵羊, 李梦珊. 纳入产品质量的中国进口贸易利得估算[J]. 数量经济技术经济研究, 2014, (12): 101-115.
[4] 魏浩, 付天. 中国货物进口贸易的消费者福利效应测算研究———基于产品层面大型微观数据的实证分析[J]. 经济学(季刊), 2016,(4):1683-1714.
[5] 徐小聪, 符大海. 可变需求与进口种类增长的福利效应估算[J]. 世界经济, 2018, (12): 25-48.
[6] 许统生, 方玉霞. 进口产品种类提高了企业成本加成吗[J]. 当代财经, 2020,(3):114-125.
[7] Ardelean A., Lugovskyy V.Domestic Productivity and Variety Gains from Trade[J]. Journal of International Economics, 2010, 80(2): 280-291.
[8] Hummels D., Lugovskyy V.Trade in Ideal Varieties: Theory and Evidence[R]. NBER Working Paper No. 11828, 2005.
[9] Feenstra R.C., Luck P., Obstfeld M., Russ K. N. In Search of the Armington Elasticity[J]. Review of Economics and Statistics, 2018, 100(1): 135-150.
[10] Cabral S., Manteu C.Gains from Import Variety: The Case of Portugal[R]. Economic Bulletin and Financial Stability Report Articles, 2010.
[11] Minondo A., Requena F. Welfare Gains from Imported Varieties in Spain, 1988-2006[R]. Working Papers Serie EC 2010-12, 2010.
[12] 陈勇兵, 李伟, 钱学锋. 中国进口种类增长的福利效应估算[J]. 世界经济, 2011, (12): 76-95.
[13] Benkovskis K., Wörz J.How Does Taste and Quality Impact on Import Prices?[J]. Review of World Economics, 2014, 150(4): 665-691.
[14] Krugman P.R. Increasing Returns, Monopolistic Competition, and International Trade[J]. Journal of International Economics , 1979, 9(4): 469-479.
[15] Melitz M.J. The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity[J]. Econometrica, 2003, 71(6): 1695-1725.
[16] Feenstra R.C. Measuring the Gains from Trade under Monopolistic Competition[J]. Canadian Journal of Economic, 2010, 43(1): 1-28.
[17] Hillberry R., Hummels D.Trade Elasticity Parameters for a Computable General Equilibrium Model[J]. Handbook of Computable Genera Equilibrium Modeling, 2013, 1: 1213-1269.
[18] Dixit A.K., Stiglitz J. E. Monopolistic Competition and Optimum Product Diversity[J]. The American Economic Review, 1977, 67(3): 297-308.
[19] 钱学锋, 王菊蓉, 黄云湖, 王胜. 出口与中国工业企业的生产率———自我选择效应还是出口学习效应?[J]. 数量经济技术经济研究, 2011,(2):37-51.
[20] Kasahara H., Lapham B.Productivity and the Decision to Import and Export: Theory and Evidence[J]. Journal of International Economics, 2013, 89(2): 297-316.
[21] Richardson D.J., Zhang C. Revealing Comparative Advantage: Chaotic or Coherent Patterns across Time and Sector and U.S Trading Partner?[J]. NBER Working Paper No. 7212, 1999.
[22] 魏浩, 郭也. 中国进口增长的三元边际及其影响因素研究[J]. 国际贸易问题, 2016,(2):37-49.
[23] Boustan L., Ferreira F., Winkler H., Zolt E.M. The Effect of Rising Income Inequality on Taxation and Public Expenditures: Evidence from U.S. Municipalities and School Districts, 1970—2000[J]. The Review of Economics and Statistics, 2013, 95(4): 1291-1302.
[24] 许统生, 陈瑾, 薛智韵. 中国制造业贸易成本的测度[J]. 中国工业经济, 2011,(7):15-25.
[25] Soderbery A.Estimating Import Supply and Demand Elasticities: Analysis and Implications[J]. Journal of International Economics, 2015, 96(1): 1-17.